I have found an example of a real world prisoners dilemma in a British game show called “Golden Balls”. The premise of the game is as follows: two players are offered a large sum of money and in the end of the game each player is given the option of split, or steal. If both players choose split then they each receive a payoff of 50075, if one selects steal and the other selects split then the player who played steal will receive a payoff of 100150 while their opponent receives nothing. I have visualized this game with a payoff table:
|P2 SPLIT||P2 STEAL|
I have taken the liberty of putting each players best responses in bold lettering, and from this table you can see that Player one’s best response to Player two’s split would be to steal, and player one’s best response to player 2’s steal would be to also steal (since this is a symmetrical game the payoffs are the same for player two as they are for player one). As you can see, the Nash equilibrium in this game would result in both players playing the steal strategy and their payoffs would be 0. The difference with this game is that the players are given an opportunity to reason with one another before their moves are played. They are to try and convince one another that they are going to play the split strategy which would result in the best mutual payoff but, since this is a simultaneous game both players ultimately have to play the move they believe will yield the greatest outcome given what they believe their opponent is going to play. Any rational player SHOULD pick steal since it is both players dominant strategy but I suppose not everyone thinks rationally…
Watch the video to understand what I mean.